Last-Minute Tax Filing Could Be Costing You Money, Experts Say

With April 13 just days away from the tax deadline, millions of Americans have yet to file their returns. But this last-minute approach could be one of the costliest financial habits, according to tax experts.

The financial difference comes down to a matter of timing. Early filers typically receive their refunds weeks sooner and are less likely to make errors or overlook valuable credits. That additional time and earlier access to refund money creates opportunities to pay down debt, build savings, or earn investment returns—small financial gains that compound significantly over time.

“Your tax return is your single largest financial transaction each year and you’ll be developing it for the next 30, 40, 50, and in some cases, 60 or more years,” explains Mark Steber, chief tax officer at Jackson Hewitt Tax Services. “It’s probably a good idea to start to develop some best practices, one of which is not to wait to the last minute to start trying to do your tax return.”

While filing early doesn’t change the amount owed or refunded, it does change what taxpayers can do with their money and when. The Internal Revenue Service issues more than 100 million refunds annually, totaling over $400 billion. This highlights the significant financial impact that timing can have for the millions of Americans who receive refunds.

For taxpayers who end up owing money to the IRS, early filing is even more critical.

“If you’re going to owe, you should have found that out several months ago, so you can start allocating money aside and you won’t run the risk of refund shock or disappointment or balance due trauma,” Steber noted.

The benefits of early filing extend beyond just financial planning. It also serves as protection against increasingly common tax-related identity theft. Once a legitimate return is submitted, it becomes significantly more difficult for identity thieves to file a fraudulent return using someone else’s personal information.

“You file early, you get your money early, but more important than getting your refund early, you lock up your data, you lock up your personal information with the IRS and your state,” Steber emphasized. “That protects you from ID thieves, from refund thieves and a whole lot of other bad things that creep into the system.”

Tax fraud has become a growing concern in recent years, with sophisticated scammers targeting taxpayers through phishing schemes, fraudulent calls claiming to be from the IRS, and attempts to file returns using stolen personal information. Filing early effectively blocks these attempts by establishing a legitimate return in the system before fraudsters can act.

The rush associated with last-minute filing also increases the likelihood of costly errors. When taxpayers hurry to complete their returns just before the deadline, they’re more prone to mistakes that can reduce refunds or increase tax bills. These errors might include mathematical mistakes, overlooked deductions, or missed tax credits that could significantly impact the final tax outcome.

Tax preparation experts recommend treating tax planning as a year-round activity rather than a last-minute scramble. Maintaining organized records throughout the year, understanding potential deductions, and consulting with tax professionals before filing deadlines can all contribute to more accurate returns and potentially larger refunds.

Even for those who haven’t begun the process yet this year, Steber recommends taking a careful approach rather than rushing through a return at the eleventh hour. If needed, filing for an extension can provide additional time to prepare a thorough return, though it’s important to note that an extension to file doesn’t extend the deadline to pay any taxes owed.

“Give some attention to your tax return each and every year,” Steber advised. “Can’t really do it this year at the last hour, but some best practices will save you money, lower your stress and put more tax refund dollars in your pocket over time.”